Interviewing for a startup role can be tricky stuff. Depending on the startup, the recruitment process can vary from being chaotic to sophisticated just like an established business. As someone who was unfamiliar with startups, I found the hiring process challenging. In between figuring out my work scope and whether to ask for equity, salary negotiations was by far one of the hardest parts of the recruitment process. Having being on the job candidate and hiring end, here’s some salary negotiation basics that will make your startup hiring experience just that little bit easier.
Tip 1: The Negotiation Mindset
Not everyone is a natural negotiator but everyone can be an effective one. It’s not a matter of whether you can or can’t. You can. It just takes practice. For some, it’s roleplaying and for others it’s reciting responses to tough questions over and over. Figure out what works for you and practice continuously.
Everything in business is negotiable. The most important piece of the puzzle is developing the ability to ask for what you want and to get it as well.
If you don’t ask, it’s always going to be ‘no’. But if you ask, there’s a 50/50 chance they’ll say ‘yes’.
Many people jump to conclusions about what negotiating salary says about them. Wanting more money doesn’t make you greedy or fussy. Wanting more money doesn’t mean you’re being advantageous or overbearing. It’s actually very courageous and admirable.
A candidate who can clearly explain what they want and articulate why, will always stand out from other candidates. I’m more likely to pay attention to them and picture where in the business I can use their negotiation skills.
Besides, the majority of businesses expect you to negotiate and most will start offering at the lower end of the role’s salary band. Personally speaking, I’ve always expected candidates to counter-offer and often leave ample wiggle room for them to ask for more.
Tip 2: Negotiations are just discussions
Don’t overthink it.
The best piece of career advice I picked up early on was to approach negotiations as conversations. Frame them as discussions where you get the chance to talk about what’s important to you and the other party explains what’s important to them. Through these discussions, both parties strive to collaboratively come up with a solution that pleases everyone.
It’s not all of nothing. It’s not a winner takes all situation. Take the pressure out of salary negotiations and just see them as normal conversations where you’re both figuring out how to best work together.
Tip 3: Not all start-ups are in the position to negotiate salary
Most startups just don’t have the budget that bigger firms do and whether they’re willing to enter into salary negotiations is dependent on their financial situation. The best way to figure out if they’re likely to entertain negotiations is to ask them about their finances. During the interview stage, get a feel for the business’ cash flow by asking about their investors, sales revenue, clients and business plans for both the short and long term.
Not only will this information help you understand how far you can negotiate your salary, but it may also impact your desire to join the startup. After all, you don’t want to be joining a business that’s struggling financially because this will most certainly impact their ability to pay you.
Tip 4: Valuate your competitive advantage
What unique skillset do you bring to the role that other candidates may not?
Maybe you have strategic capabilities which will allow you to better align marketing campaigns with overarching business objectives. Perhaps you bring sales experience to a project management position, meaning that the team can lean on your persuasive communication skills when engaging with stakeholders. Work out what you have that others don’t.
Then ask the startup what pain points the role is currently facing and pinpoint how your competitive advantage can help solve these problems. Startups have to justify every dollar spend. So position yourself as a candidate they can’t refuse by clearly articulating your value and how you can help the team achieve their goals.
Tip 5: Of course, do you market research
There’s no gut feelings or hunches in negotiations. Just hard data.
Do your due diligence and find out how much the market is paying for your skillset. Work out what the current salary is for the role’s responsibilities, seniority, location and organisation size. If it’s a remote role, research similar in-person roles in the city that the business is based in. This will give you a good estimate of the salary package that the startup may offer.
Admittedly, startup salaries aren’t as widely collected and published when compared to other business types. However, you can still use the salary data of established businesses to demonstrate what you’d otherwise be offered if you worked in a similar role.
Tip 6: Work out what you need to survive
This is particularly important if you’re salary negotiating a remote startup role because labour is priced differently according to location. You hope that they’ll offer a competitive pay packet but it’s helpful to ask yourself how much money you need to live where you do.
Be realistic about it too. How much is rent + groceries + other non-negotiable monthly lifestyle expenses? What’s the least you need in order to survive? Whatever that number may be, multiply it by 10% and that’s your bare minimum in salary negotiations.
Why 10%? So you can give yourself some wiggle room.
Tip 7: Don’t lose sight of the whole picture
There’s generally more room for movement on non-monetary compensation during startup salary negotiations. Read your contract carefully and consider what’s currently being offered. Look at your work scope, working hours, vacation time and other incentives. Ask yourself where you want to see an improvement and factor these into your negotiations. You never know, you might get an additional week of holidays if you ask!
You can also consider writing a secondment into your contract. Have you always been interested in another area of the business but never had the chance to try it out? Startups are a great place to learn and grow rapidly. Think about asking if you can join a particular project or spend half a day or a full day during the week working with a different team.
Additionally, make sure you understand which country’s laws govern your employment contract. Like salaries, labour laws vary from country to country and it’s worth investigating how the contract differs from one in your local destination. I always recommend getting some legal advice if you require additional interpretation after you’ve done your preliminary research.
Tip 8: Don’t sweat it if negotiations fall through
If salary negotiations don’t go according to plan, don’t get hung up on it. It’s a lesson learned and you’ll have this experience to build on the next time you interview. Regroup and consider on whether you’re willing to take the job despite being presented with a salary package that doesn’t meet your initial expectations.
Be gracious if you decide to walk. The last thing you want is to burn any bridges. Reiterate your passion for the role at the startup but explain that you’re not in the position to take the compensation package that’s on the table. Always wrap up discussions on good terms because the startup world is mega small and you’re bound to cross paths again.
Tip 9: Ask for a salary review
Make sure there’s no resentment on your part if you do decide to take the role. The last thing you want to do is to start a role feeling bitter about not getting what you wanted. Concentrate on the positive growth opportunities you’ll get by working at a startup and be excited about what’s to come.
Besides, it’s not all doom and gloom if you don’t get the salary you wanted. If you truly believe in the value that you bring to the startup, propose a performance review in 6 months time with the view of revisiting salary.
Pitch a project where you can demonstrate your competitive advantage to your manager. Design an opportunity where you can deliver a series of quick wins that will help propel the team forward. Work your ass off during the 6 months and keep a detailed log of your successes. When you have your performance reviewed, serve up this hard evidence up to highlight why you deserve a higher salary.